NEW YORK (Legal Newsline) - JPMorgan Chase Bank has agreed to pay $614 million to settle a False Claims Act lawsuit, but it is unclear how much of that will be paid to a whistleblower who brought suit against the company.
On Tuesday, the U.S. Department of Justice announced the settlement, which resolves allegations that JPMorgan Chase improperly approved thousands of residential home mortgage loans for government insurance and refinancing.
The United States filed its complaint-in-intervention on Tuesday, the same day a federal judge approved the settlement.
The case, which was initiated by Keith Edwards in 2013, was filed under seal.
Issues remaining, that will be part of the public record, are how much Edwards will be paid and how much his attorneys will be paid.
"Relator shall submit any application for attorneys fees and costs... within two weeks of the date he either reaches agreement with the Government on the issue of appropriate share of the Settlement Amount or the Court issues a decision on that issue," the settlement says.
Representing Edwards is David G. Wasinger of The Wasinger Law Group in St. Louis.
Manhattan U.S. Attorney Preet Bharara stated: "For years, JPMorgan Chase has enjoyed the privilege of participating in federally-subsidized programs aimed at helping millions of Americans realize the dream of homeownership. Yet, for more than a decade, it abused that privilege. JPMorgan Chase put profits ahead of responsibility by recklessly churning out thousands of defective mortgage loans, failing to inform the Government of known problems with those loans, and leaving the Government to cover the losses when the loans defaulted. With today's settlement, however, JPMorgan Chase has accepted responsibility for its misconduct and has committed to reform its business practices. This settlement adds to the list of successful mortgage fraud cases this Office has pursued."
The lawsuit alleged JPMorgan Chase submitted false certifications to the Department of Housing and Urban Development, the Department of Veterans Affairs and the Federal Housing Administration that caused the three to accept for government insurance and refinancing thousands of loans that were not eligible.
When those loans defaulted, it caused substantial losses to the federal agencies. JPMorgan Chase was also cited for failing to self-report the loans it had identified as either fraudulent or deficient.
Associate Attorney General Tony West said the resolution is a product of the DOJ's efforts to "hold accountable those whose conduct contributed to the financial crisis."
JPMorgan Chase admitted to failing to report 582 loans from 2007-09 that it identified as having been affected by borrower or correspondent fraud.
From Legal Newsline: Reach editor John O'Brien at email@example.com.